The price of Ethereum (ETH) has somewhat stalled in recent weeks, but declining network fees indicate there is room for optimism. The lower entry threshold could facilitate more convenience and utility.
As it happens, average Ethereum fees have returned to their normal levels after skyrocketing to a yearly high of $14 per ETH transaction in early May. They have recently dropped to $4.28 per transaction, according to the data shared by crypto analytics platform Santiment on June 1.
These results demonstrate a decline of 69% from only 25 days ago, when the meme coin hype, triggered by the launch and massive success of the Pepe (PEPE) token, had forced Ethereum and Bitcoin (BTC) network fees to soar.
As the Santiment team further explained, the plummeting transaction fees are a good sign for a broader Ethereum network adoption, accessibility, usage, and engagement, as “more affordability encourages more utility.”
At the same time, the percentage of Ethereum supply on crypto exchanges has dropped to a new all-time low of 9.9% under the influence of the self-custody trend amid security concerns around crypto trading platforms, as well as a lack of regulatory clarity over whether ETH is a security or commodity.
In late March, Finbold reported on the previous record low supply of Ethereum on exchanges, which at the time stood at 10.31%, which meant that nearly 90% of ETH was held away from exchanges but also suggested the high level of confidence from hodlers.
As things stand, Ethereum is currently changing hands at the price of $1,864.04, recording a decline of 0.21% on the day but a 4.46% gain across the previous week and a 1.69% increase on its monthly chart, according to the latest data retrieved on June 1.
The decline in Ethereum fees is a positive development for the network. It makes it more affordable for users to transact on the network, which could lead to increased adoption. The decline in fees is also a sign that the network is maturing and becoming more efficient.
The increase in self-custody is also a positive development. It gives users more control over their assets and reduces the risk of theft. The increase in self-custody is also a sign that users are becoming more confident in the security of Ethereum.